3. USA, 1918-1968
5 essays to learn BUT only
1 to write in the exam
Issue 3
An Evaluation Of The Reasons For The Economic
Crisis 1929-33:
Factor 1: Republican Governments
Policies
Factor 2: Overproduction &
Under-consumption
Factor 3: Weaknesses Of The
Banking System
Factor 4: International Economic
Problems
Factor 5: Wall Street Crash
AIMS OF
ESSAY:
To Be Able To
Discuss the
factors which
contributed to
the economic
(financial) crisis
in American
between 1929 &
1933
Aims Paragraph 3:
• To Understand Why The USA & Europe
Introduced Import Tariffs On Trade
• To Explain The Impact These Tariffs
Had Both At Home & In Europe
Have The Background Knowledge & Argument To
Write Your Third Paragraph For Essay 3
What Were Their Economic Policies?
THIRDLY:
3. Strict Trade Tariffs
• The Fordney-McCumber Act 1922 created
strict tariff barriers imposed on foreign
imports e.g. goods from Europe
• It reduced the number of foreign goods being
sold in America
• The idea behind this was to led to an increase in
American own goods being bought at the
expensive of foreign goods
• This is known as ’protectionism’
• However this back fired and the Europeans
did the same putting a high tariff on
Americans goods!
• Therefore the US economy could not expand
into foreign markets as rapidly as they could
produce – resulting in over-production/underconsumption
PLAN FOR PARAGRAPH
International Economic Problems
Read Through
Paragraph 3 On
Handout
1. Start with an Opening Argument e.g. state there is a link
between the isolated factor & the question
2. Put in Knowledge – Details of what the US market did after
their markets became saturated & why they did it
3. Put in Analysis – Explain why this hurt America in the long term
(loans)
4. Knowledge – Details of what European countries did to pay back
loans
5. Analysis – Explain why again this hurt America in the long term
(trade)
6. Evaluation – make an evaluation: how were the Republican
policies to blame?
American Tariffs
It can be argued that the Depression of the 1930s was caused
by the Republican government’s desire to protect US
businesses
In order to protect US businesses, the Republican Governments
had passed the Fordney McCumber tariff of 1922 as way to
protect the countries economy from European competition
This tariff was placed on imports (40%) so that now people
would be inclined to only buy American goods
However soon after & possibly in response, foreign countries
also raised tariffs against the US goods…
…which made it impossible for the USA to export their goods
and get rid of the goods they had mass produced in excess
However this was not the only reason Europe placed tariffs on
imported goods – WWI is also to blame for international trade
problems
World War One
During WWI American became a major creditor and
after the war she offered loans to help countries
get back on their feet (rebuilding devastated areas
& reviving trade and industry)
Many countries bought American goods after the
war as well as little was being produced at home –
this greatly contributed to the boom of the 1920s
However with the saturation of the US market the
Americans wanted the European nations to repay
the loans that they had taken out
European victors owed around $10 billion in debts
to America which would have come in handy at that
time due to her saturated market at home but
some countries had problems making the payments…
European Tariffs
In order to solve their economic problems European states, EXCEPT
BRITAIN, placed tariffs on imported goods from America
The European states did this so that they could become economically
self-sufficient and keep out the products of other countries – just
like America had done
These tariffs on imported goods from the US greatly contributed to
the economic crisis…
As a result, it was virtually impossible for America to increase
exports overseas and expand its foreign markets
Due to this, a stockpiling of goods at home in the USA started to
develop
This led to cutbacks in production which made the rates of
unemployment rise and profits and the value of shares decrease
SUM UP: International Trade
The First World War impacted European economies – they purchased
many goods as well as loans from America = the 1920’s BOOM
US Tariff barriers of 1922 meant that other countries found it
difficult to pay back loans as they were struggling to sell their goods in
America
This resulted in all European states, except Britain, placed tariffs on
imported goods
This came at a bad time for America as her markets at home had
saturated - US economy couldn't expand to foreign markets to solve this
Therefore the Republican policies on import tariffs which were
thought of as protectionist, but were actually very damaging
The damaged overseas market and overproduction of goods went
hand in hand as factors which also led to the depression
Background Questions
Q1. What year was the Fordney McCumber tariff passed?
Q2. What was this tariff meant to protect from?
Q3. What % were at the tariffs at?
Q5. How was this to going to help America?
Q6.What did Europe do in response?
Q7. What problem did this have for America?
Q8. Which 3 reasons was WWI good for America?
Q9. Why did America recall these loans?
Q10. How much did Europe owe America?
Q11. Why did Europe introduce tariffs?
Q12. What problem did this create in America?
Q13. What contributed to the 1920s boom?
PLAN FOR PARAGRAPH
International Economic Problems
Read Through
Paragraph 3 On
Handout
1. Start with an Opening Argument e.g. state there is a link
between the isolated factor & the question
2. Put in Knowledge – Details of what the US did after their
markets became saturated & why they did it
3. Put in Analysis – Explain why this hurt America in the long term
(loans)
4. Knowledge – Details of what European countries did to pay back
loans
5. Analysis – Explain why again this hurt America in the long term
(trade)
6. Evaluation – make an evaluation: how were the Republican
policies to blame?
OPENING ARGUMENT 3
International Economic Problems
Another factor which contributed to the
economic crisis of the 1930s was the
USA’s poor foreign trade system
International Economic Problems
KNOWLEDGE 1
ARGUMENT 1
• Following the saturation of
the American market the
Fordney-McCumber tariff
was passed in 1922 as a form
of ‘protectionism’
• However… these high tariffs
hurt the US in the long run
• It meant the introduction of
high tariffs (40%) on
imported goods
• So American’s only bought
American goods
• They meant other countries
found it difficult to pay
back the loans they owed
America or buy goods as
their own produce were not
making profit in America
• Which was greatly needed
back by the US
International Economic Problems
KNOWLEDGE 2
ARGUMENT 2
• With Germany & other
countries struggling to pay
America they had to find
other ways to pay back the
war loans
• In trying to meet their
debts these European
countries actually damaged
the US economy by making
the problems of
overproduction worse
• European countries, except
the UK, introduced strict
import tariffs, just like in
the US in 1922
• Resulting in… closed
factories, loss of jobs… etc
International Economic Problems
EVALUATION:
Overall, it can be argued that the Republican
Governments desire to protect US businesses had
the reserve effect as Europe's similar tariff
polices meant US companies struggled to sell their
goods in Europe as well as at home, resulting in
businesses closing & unemployment rapidly rising.
Also Europeans countries were unable to pay
America back the war loans they had borrowed as
they could not sell their goods in America
PLAN FOR PARAGRAPH
International Economic Problems
1. Start with an Opening Argument e.g. state there is a link between the
isolated factor & the question
2. Put in Knowledge – Details of what happened after the US market
became saturated & why they did it
3. Put in Analysis – Explain why this hurt America in the long term (loans)
4. Knowledge – Details of what European countries did to pay back loans
5. Analysis – Explain why again this hurt America in the long term (trade)
6. Evaluation – make an evaluation: how were the Republican policies to
blame?
Read Through Paragraph 3 On Handout